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Bad Vibes Persist For Bonds and Rates
Bonds began the day in weaker shape, thus keeping the threat of an ongoing correction alive. After a fairly sideways morning, MBS dropped more sharply in the afternoon. Treasuries maintained a gentle, but clear selling trend throughout the day. Moreover, yields easily broke up and over the 1.125% pivot point without a second though. Taken together, this is bad news for rates as it easily reinforces the negative short term trend we've been following. In turn, that negative short-term trend is part of a broader negative trend in the bigger picture.
Econ Data / Events
Fed MBS Buying 10am, 1130am, 1pm
ADP Employment 174 vs 49 f'cast, -78 prev
ISM Services PMI 58.7 vs 56.8, highest in 2 yrs ISM Employment Index highest since Feb 2020
Market Movement Recap
08:33 AM Strong corporate earnings and steady-to-stronger econ data in Europe conspired to push bond yields higher overnight. This morning's ADP data is adding fuel to the fire. 10yr yields are pushing the 1.125% technical level (1.127% currently). MBS are down about an eighth of a point.
10:26 AM Weaker following ISM data (10yr hit highs of day at 1.1323), but they've been bouncing back since 10:20am as stocks slide. Stimulus gridlock could be a factor.
01:57 PM Choppy trading throughout the morning hours with a slight bias toward weaker levels. MBS down an eighth and closer to the day's weakest levels. 10yr is up 3bps at 1.125%. Stocks are up half a percent and near their highs of the day.
03:36 PM Bonds have trickled back to the weakest levels of the day, but at a measured pace. No major sources of inspiration here, but MBS seemed to struggle more after the Fed's final buying operation of the day (which ended at 1:20pm)
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MBS Commentary
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Bad Vibes Persist For Bonds and Rates
Bonds began the day in weaker shape, thus keeping the threat of an ongoing correction alive. After a fairly sideways morning, MBS dropped more sharply in the aftern... (read more) |
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Housing News
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CoreLogic reports that December saw yet another acceleration in home price increases. The company's Home Price Index (HPI) rose 9.2 percent on an annual basis. The increase in November was 8.2 percent. The month-over-month change, 1.1 percent, was al... (read more) |
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Housing News
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The Urban Institute (UI) has looked at a final mortgage rule issued by the Consumer Financial Protection Bureau (CFPB) in late 2020 which would provide a 3-year pathway to safe harbor for loans that are a rebuttable presumption or nonqualified mortga... (read more) |
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Mortgage Rate Watch
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Mortgage Rates were steady to slightly lower yesterday even though prevailing trends in the bond market suggested caution. Today's trading is a different story. Granted, there haven't been any huge, dramatic moves, but today's bond market weakness ad... (read more) |
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Rob Chrisman
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Companies and organizations around the nation are wondering about when in-person conferences will become the norm again. While they’re wondering about health concerns, picking the right venue for that special event can be a problem. Or not, if ... (read more) |
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Housing News
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Public and privately funded construction spending ended 2020 with a 4.7 percent increase over spending in 2019. The U.S. Census Bureau said the combined outlays for the recent year was $1.430 trillion compared to 1.365 trillion the prior year. Reside... (read more) |
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